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President & CEO Saleel Awsare expressed strong optimism for the drone market, noting Lantronix is engaged with over 10 drone manufacturers for military and industrial applications. He highlighted the company's camera expertise and North American, TAA/NDAA-compliant manufacturing as key differentiators. Awsare confirmed initial shipments for the Redcat win began in the June quarter, providing visibility into fiscal 2026. Regarding the Q1 guidance, he explained that the expected growth is driven by broad-based momentum across the core business, including Edge IoT and out-of-band networking solutions.

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President and CEO Saleel Awsare stated that the acquired NetComm business is tracking to exceed its annualized revenue target of $6-7 million by 15-20%, noting strong engagement with key customers and new cross-selling opportunities. Regarding the macro environment, Awsare confirmed no order cancellations or pushouts and highlighted the company's plan to exit China manufacturing by early Q1 2026. CFO Brent Stringham added that less than 5% of China-made products are currently destined for the U.S. On the Gridspertise topic, Awsare reiterated that they remain a single-source supplier and are closely engaged as Gridspertise continues its deployment.

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CEO Saleel Awsare confirmed that the long-term outlook for the smart grid customer, Gridspertise, has not changed and that they remain sole-sourced. He noted the current slowdown is related to the customer's deployment rollout and mentioned two active pilots in North America. CFO Brent Stringham added that non-GAAP gross margin is expected to be slightly higher in Q3 compared to Q2, driven by product mix.

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CEO Saleel Awsare explained that the North American smart grid project is in the early proof-of-concept stage and a significant revenue ramp is likely 18 to 24 months away. CFO Jeremy Whitaker confirmed that the Q1 2025 gross margin guidance of low-to-mid 40s does not anticipate any meaningful inventory charges and is expected to benefit from an improved product mix.

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CEO Richard Phillips confirmed that there is incremental growth in Medical beyond the largest customer, stating that most new customer introductions over the last two years have been in that segment. Regarding long-term growth, he described the strategy as "all of the above," including recovery in demand from won programs, aggressively pursuing new business, and expanding relationships with current customers, with the biggest new customer wins expected in the medical space.

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CEO Richard Phillips stated that while the company is aware of the possibility of order pull-forwards ahead of tariffs, they have not received strong indications from customers that this is happening on a large scale. He described the current quoting funnel as "very healthy" with pockets of strength. CFO Jana Croom addressed OpEx, cautioning that the current low SG&A level of 3% of sales is not sustainable in FY '26 as the company will need to make investments to support its return to growth.

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Chief Financial Officer Jana Croom responded that the softness is broad-based, though the automotive vertical is holding up relatively well. Chief Executive Officer Ric Phillips confirmed that bookings over the last six months were in line with internal expectations. Jana Croom clarified that the current low SG&A expense is not sustainable long-term and the company's goal remains 3.5% of net sales, acknowledging the need to balance discretionary cuts with inflationary pressures.

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Chief Executive Officer Ric Phillips responded that there is no clear line of sight for when the auto inventory glut will clear, but the company monitors it closely. Chief Financial Officer Jana Croom added that the Q1 gross margin of 6.3% was disappointing and expects a measured improvement in Q2 followed by more significant improvement in the second half of the fiscal year. She also indicated that with Q2's revenue decline expected to be in line with Q1's, the second quarter would likely be the revenue low point.

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CEO Michael Murray detailed a multi-faceted opportunity with Theon, including supplying internal microdisplay needs, co-developing application-specific solutions like DayVAS and DarkWave for the European market, and pursuing joint R&D. Murray confirmed Theon would help increase utilization at the Dalgety Bay facility. He also stated that Q2 had a positive book-to-bill, and the majority of delayed orders were subsequently received, with significant R&D orders still expected in 2025.

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CEO Michael Murray stated that after a slow start to the year, order flow freed up in Q2, and the company is tracking several large government orders in the $10-$20 million range, expecting a stronger second half. He explained that R&D awards, while modest in initial dollar value (e.g., $1M-$2.5M), are strategically vital as they unlock significant future opportunities, such as the 'off-the-visor' technology and next-generation color microLEDs for soldier systems.

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CEO Michael Murray confirmed no negative impact from government budget changes, instead noting an influx of requests for training, simulation, and drone systems. He reported significant and steady order activity in Q1 2025, with more announcements pending. Regarding automation, Murray described an aggressive, phased rollout starting this quarter, aimed at increasing manufacturing throughput to support higher volumes without adding significant headcount.

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CEO Michael Murray explained that international business is a significant growth opportunity, expected to expand due to geopolitical factors and increased NATO spending, though the sales infrastructure is not yet fully built out. He stated that the Q3 book-to-bill was slightly below 1:1, but remains positive and ahead of schedule for the full year. Murray also conveyed optimism that the new administration would be a long-term positive for Kopin, citing its focus on NATO spending, U.S. defense budgets, and support for small-cap companies.

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CEO Kirsten Neukwist explained that the ISCO partnership aims to tag over 400 million containers in 4-5 years, with mass production targeted for 2026, representing a significant volume opportunity. She confirmed that Q3 order patterns are tracking in line with guidance. Both Neukwist and CFO Ed Kernbauer stated that gross margins, which were negatively impacted by dual manufacturing costs in H1, are expected to see a positive impact in Q3 and Q4 following the completion of the Singapore production shutdown.

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Executive Kirsten Newquist stated that Q1 did not benefit from any significant customer order pull-ins. Regarding Q2, she noted that while there is some customer caution and a few small orders on hold, the company has not seen significant concerns, and the current guidance reflects any anticipated slowdown as everyone awaits clarity on tariffs.

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Executive Justin Scarpulla indicated the Q4 customer pull-in was largely responsible for the $600,000 revenue beat versus guidance and could be triangulated from the Q1 outlook. Regarding gross margin cadence, he stated that current consensus estimates are directionally in the ballpark. Executive Kirsten Newquist noted that while they are excited about new projects, significant growth from them is expected more in 2026 than 2025, as 2025 will be a development year.

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CEO Brian O’Toole confirmed that a 'significant portion' of the backlog is tied to Gen 3 imagery, analytics, and related satellite solutions from large, previously announced contracts. He explained that the guidance range accounts for both the uncertainty in U.S. government contract timing and the inherent difficulty in precisely forecasting the closing of large deals, which is typical for the second half of the year.

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CEO Brian O'Toole stated that a significant portion of the backlog will convert to revenue in the coming months, particularly in the second half of the year, with a strong backlog extending beyond 2026. CFO Henry Dubois confirmed that professional services revenue is expected to decrease in Q2 following a large milestone-based recognition in Q1.

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CEO Brian O'Toole confirmed that the market is responding positively to Gen-3's advanced capabilities, leading to long-term agreements in line with expectations. He noted that while customers are excited for Gen-3, the high-frequency monitoring of Gen-2 remains highly valued and continues to be purchased. CFO Henry Dubois added that while professional services should see some growth in 2025, imagery and analytics revenue is expected to grow at a faster rate long-term.

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CEO Brian O'Toole explained that while some revenue shifted due to the natural lumpiness of milestone-driven contracts, the company expects a strong Q4 and remains on track for full-year guidance. He clarified that Q3 bookings were not specifically for Gen-3 but were driven by current software and AI analytics capabilities that will transition to the Gen-3 platform, citing the Luno award as a key example.

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CEO Cheri Beranek projected that the data center opportunity would begin contributing slightly to revenue in fiscal 2026, with a more significant impact expected in fiscal 2027. She clarified Clearfield's strategy is to connect data centers for its community broadband customers, not compete in the hyperscaler space. CFO Dan Herzog stated that OpEx is expected to trend slightly higher in Q4 due to trade shows, travel, and year-end professional service fees.

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Chairman & CEO R. Jeffrey Bailly confirmed that the inventory destocking issue appears to be resolved, with robust growth across several markets and low channel inventory at AJR. He noted that after a slight decline in Q1, the largest robotics customer saw a significant increase in Q2, balancing out to meet annual expectations. SVP, Treasurer & CFO Ronald Lataille added that while Q3 margins will be pressured by labor issues, he expects a rebound in Q4, stating that tariffs are not expected to have a material impact on margins.

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CEO R. Jeffrey Bailly indicated that the customer inventory destocking issue appears to be resolved, with channel inventory for AJR products now running low. He clarified that the largest robotics customer saw a slight decline in Q1 followed by a strong increase in Q2, aligning with annual expectations. CFO Ronald Lataille projected that gross margins would face pressure in Q3 due to labor issues but should rebound in Q4, with tariffs not expected to have a material impact.

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CEO Jeff Bailly clarified that modest, low single-digit growth is expected for both the largest customer and the robotic surgery segment as a whole in 2025. He stated UFP holds about two-thirds of the business with its largest customer and views the customer's own capacity development as a positive for supply chain stability. Bailly also confirmed that the company is not seeing excess customer inventory and that previous destocking headwinds appear to be resolved.

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CEO Jeff Bailly clarified that the modest growth outlook for 2025 applies to both the largest customer and the robotic surgery segment as a whole. He stated that UFP holds approximately two-thirds of the business with its largest robotic surgery partner and described the relationship as highly collaborative. Bailly also confirmed that the company is not seeing any pockets of excess inventory and that previous destocking headwinds in other markets appear to have subsided.

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The March backlog was $27.4M. The difference in revenue guidance ($51M vs a prior $55M+) is due to different timeframes being discussed (12 months post-acquisition vs. fiscal/calendar year). The normalized quarterly OpEx is expected to be around $5M, excluding extraordinary M&A costs and amortization.

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CFO Albert Miranda reported the backlog at $27.4 million. He clarified that the $51 million revenue forecast is for the 12-month period following the G5 acquisition (February to February), explaining the apparent discrepancy with other figures that may reference different time frames. Miranda also projected that the combined quarterly operating expense would be approximately $5 million, excluding extraordinary M&A costs and amortization.

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CFO Albert Miranda clarified that the yield issues were minor but were exacerbated by Chinese supply chain delays that hindered their ability to source replacement materials quickly. CEO Sam Rubin highlighted significant cross-selling potential, noting that many systems use both LightPath's uncooled and G5's cooled cameras, and confirmed these synergies are not yet factored into G5's earn-out projections. Albert Miranda added that G5's higher-margin camera business is expected to lift the combined company's gross margin.

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CEO Sam Rubin confirmed the new Mantis camera was developed from detailed customer conversations and the expertise of new team members. CFO Albert Miranda explained that while structural costs were reduced, the savings would be reinvested into business development initiatives. Sam Rubin also clarified the automotive timeline, noting volumes will be smaller in the next two years as the industry works on a behind-the-windshield solution, with significant volume ramping in fiscal 2027.

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The new Mantis camera version was developed based on detailed customer conversations and expertise from new team members. The $1.2 million in cost savings will be reinvested into business development initiatives. The automotive opportunity timeline has shifted further out, with significant volumes not expected until a behind-the-windshield solution is adopted around 2028.

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CEO John Givens stated that Q1 orders were likely driven by agencies spending budgeted funds before they were lost, rather than a macro pull-forward. He confirmed V-XR interest is fueled by de-escalation training grants and adjacent markets like private security. Regarding the STEP program, Givens described the move to 3-year contracts as a strategy to align with faster tech cycles, while CFO Alanna Boudreau added that the new terms provide more guaranteed recurring revenue by removing a previous 'easy out' for customers.

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CEO John Givens explained that while the funding environment may remain soft for another one to two quarters, he anticipates it will return stronger and more focused on VirTra's solutions. He detailed advocacy efforts in Washington D.C. to refine grant processes. Regarding the IVAS program, Givens described the transition to Anduril as 'incredibly positive,' citing Anduril's deep government contracting experience and the program's strong performance in recent tests.

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CEO John Suzuki clarified that there were no pull-in orders; in fact, federal orders were delayed. He stated that Q2 gross margin is expected to remain above the 42% target, as anticipated tariffs from Mexico have not yet materialized, though some tariffs from Vietnam have. Suzuki also confirmed that revenue from the BKR 9000 device was up sequentially in Q1.

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CEO John Suzuki stated that Q1 order volume was in line with seasonal expectations, though some federal orders were delayed into Q2 due to the timing of budget approvals. He confirmed the strongest interest for the BKR 9000 comes from the state and local government market, driven by its multi-band capability and attractive price point. Regarding the software business, Suzuki explained that the company is still in the early stages and expects to provide more clarity on its long-term potential at the end of 2025.

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CEO Pete Smith stated that Aviat is comfortable with the full-year consensus and noted that potential order pull-ins to avoid tariffs could be a positive swing factor. He also commented that the U.S. Tier 1 capex cycle has likely bottomed, with a potential uptick in microwave demand lagging by a couple of quarters. CFO Michael Connaway added that Q3's strong gross margin was driven by M&A synergies and a favorable software mix, which he does not expect to persist at the same level in Q4, leading to a more conservative margin outlook.

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CFO Michael Connaway highlighted that strong bookings from the Pasolink and 4RF businesses were key drivers, with the company's book-to-bill ratio at 1.08. CEO Pete Smith noted that a faster recovery in the U.S. Tier 1 market would be an upside to the current guidance. Connaway added that Pasolink's margins improved in Q2 and are expected to see further runway in the second half of the year as the manufacturing transfer completes.

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CFO Michael Connaway explained that Q1 gross margin erosion was driven by an unfavorable mix shift away from the higher-margin Americas business and weaker software sales, both of which are expected to normalize. He projected a "nice step-up" in Q2 margins, with further improvement in the second half of the year. Connaway also noted that the order trajectory is strong, with a book-to-bill over 1 in Q1 and an even stronger start to Q2. CEO Pete Smith added that the company could achieve record bookings in the December quarter.

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CEO Pete Smith and CFO Michael Connaway confirmed the year-end backlog was approximately $290 million. Smith stated that the 4RF acquisition would see some growth but an immaterial earnings contribution in fiscal 2025. Connaway explained that while full-year gross margins will be dampened by mix changes, he expects margins to improve sequentially through fiscal 2025 from the Q1 low point.

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President and CFO Kevin Buchel confirmed an 8.5% surcharge was implemented in April to cover tariff costs, which was received fairly by the market, and noted a typical annual price increase is also planned for July. CEO Richard Soloway described the relationship with ADI as progressing well, with good sell-through stats and valuable introductions to large dealers, reiterating the potential for ADI to become a 5% of total revenue customer.

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President and CFO Kevin Buchel reported that the ADI relationship is progressing well, introducing NAPCO to new dealers like Securitas, and he expressed hope that ADI could become a 10% of equipment sales customer. Regarding seasonality, Buchel stated that historically, Q4 (the June quarter) is the company's strongest. Despite recent disruptions, he expects that pattern to hold, anticipating Q3 to be a comeback quarter and Q4 to be even stronger.

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Kevin Buchel, President, COO & CFO, expressed high satisfaction with the ADI relationship after one year, highlighting that ADI has facilitated introductions to large dealers and could soon become a 10% hardware customer. Regarding the other distributor, he explained it is difficult to predict a precise timeline for inventory reduction as much of their business occurs late in the quarter, but the company is actively working on it.

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Executive Nick Grant explained that the slowdown in customer orders began mid-quarter, but the main variance was a $1.5 million shipment delay due to late-quarter engineering challenges. He identified the semi and auto/EV markets as the biggest potential swing factors, citing a healthy project pipeline. CFO Duncan Gilmour added that while cost-cutting is lowering the breakeven point from the previous ~$30 million level, the midpoint of Q2 guidance ($27M-$29M) is still slightly below breakeven.

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Executive Nick Grant confirmed that the company is seeing timing-related pushouts, not cancellations, and attributed the strong Life Sciences orders to broad-based demand for induction heating solutions. Executive Duncan Gilmour explained that reaching the high end of the guidance depends on the delivery of already-delayed backlog in the second half and a continued recovery in the back-end semi market.

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Executive Nick Grant clarified that the $2 million in 'pushouts' were shipment delays from Q3 into Q4, and separately confirmed customer-requested delays in the front-end semi market, where a recovery is not expected until H2 2025. Executive Duncan Gilmour attributed the strong gross margin primarily to a favorable product mix with higher back-end semi sales, noting that cost-saving initiatives contributed about one percentage point to the improvement.

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Executive Nick Grant explained that order patterns were typical, with softness early in the quarter and strength at the end. He noted that most delivery pushouts were from Q2 into Q4 of the same year, not into 2025. Regarding the Alfamation integration, Grant confirmed it is progressing well but is not yet fully complete.

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CEO Jeff Benck reported that Q1 bookings were up year-over-year but flattish sequentially, as some larger deals were delayed due to tariff uncertainty. He stated the anticipated Medical rebound is driven by both the normalization of channel inventories and new competitive program wins. CFO Bryan Schumaker indicated the full-year tax rate is expected to be around 24%, dropping slightly in the second half from the Q2 guidance range of 24-26%.

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CEO Jeff Benck identified life sciences, particularly DNA sequencing systems, and medical devices like fluid management and monitoring solutions as areas with strong new bookings. He expressed confidence that the segment's underperformance is due to industry-wide inventory rebalancing, not market share loss, and expects a recovery in the second half of the year. CFO Bryan Schumaker noted that future gross margin depends on mix and operational execution, while Benck added that the company is also focused on leveraging growth to expand operating margins.

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CEO Jeff Benck expressed increased optimism for the Semi-cap sector's recovery and the continued strength in Aerospace & Defense. He confirmed the pricing environment remains rational, with Benchmark differentiating through complex, engineering-led solutions. VP of Finance Arvind Kamal projected a potential 25-50 basis point operating margin improvement from a full semi-cap recovery, while Jeff Benck added that overall revenue growth leverage would provide further upside.

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Management explained that the decline in Latin America was due to the lumpy nature of large projects in the region. While they will still pursue opportunities there, the primary focus remains on the USA and EMEA. They also confirmed that the supply chain has normalized and there are no significant remaining constraints.

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CFO Jeff Hochstadt clarified that while channel inventory levels are improving, the issue is not completely resolved, but CPI Card Group is winning business in a strong market. CEO John Lowe added that the new 'all-in-one' chip technology is in early stages with long adoption cycles, making it premature to quantify the financial impact, but noted CPI is positioned as an early adopter.

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CFO Bob Tirva and CEO Tom Wilkinson responded that supply challenges are limited to end-of-life components for legacy products and that they can meet all demand for new products. Bob Tirva noted that carrier inventory of legacy products is generally low, with some remaining at AT&T. He also clarified that the $10 million order is for two SKUs—a camera and a non-camera version of a feature phone—for a single carrier.

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CEO Tom Wilkinson stated that Sonim has significant visibility and expects carriers to minimize year-end inventory. He explained the new scanner products are a natural portfolio extension and also address an identified market need, with the initial focus being on hardware sales. CFO Bob Tirva clarified that while gross margins were strong, calling the 30% level a 'new norm' would be premature as it was partly due to lower-than-forecasted carrier rebates, which are difficult to predict.

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CEO Tom Wilkinson confirmed there were no significant efforts to pull revenue into Q2 and that the company's control over its supply chain prevented any impact from component shortages. CFO Bob Tirva added that future gross margins will depend on product mix, as the higher-volume XP3 feature phone has a lower margin than the XP8 smartphone. However, he affirmed that the Q2 margin level is a fair floor to consider going forward.

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